EC Extends Austrian Probe
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By Darren Shannon
Lufthansa yesterday said it was surprised by the European Commission’s decision to extend an investigation of the German carrier’s proposed takeover of Austrian.
The EC had been expected to issue a decision from a preliminary investigation on Lufthansa’s plan on July 1, but the executive branch of the European Union instead has announced the launch of more extensive study because of concerns about possible loss of competition.
“Due to the fact that [for] many years a joint venture exists between Lufthansa and Austrian, the opening of the in-depth investigation is surprising for Lufthansa,” said the German airline in a release.
“Nevertheless Lufthansa remains confident to receive the necessary approvals with justifiable remedies,” it added, noting that antitrust approval has already been granted by regulators in Albania, Bosnia, Canada, Israel, Turkey and the U.S.
Competition Commissioner Neelie Kroes in an EC release, however, noted, “The Commission has decided to open an in-depth merger investigation into Lufthansa’s takeover of Austrian Airlines because it has serious concerns that the result for passengers could be higher prices or reduced services on certain routes.
“It is essential that airline consolidation does not deprive consumers of a choice of airlines, competitive prices and other benefits of liberalization of air transport in the EU. I hope that, in a spirit of mutual cooperation, we will be able to work closely with Lufthansa in the coming weeks to find timely solutions to these concerns.”
The EC said its preliminary investigation found that the proposed takeover would lead to “competition concerns” on routes from Vienna to Brussels, Cologne, Frankfurt, Geneva, Munich, Stuttgart, and Zurich.
“Lufthansa proposed remedies, but the Commission found that these remedies, while reducing significantly the number of problems, were not sufficient to allow the merger to be cleared at this point in time,” added the EC.
“The Commission will continue to work closely with Lufthansa to resolve the outstanding issues as quickly as possible.”
A separate EC investigation is still pending on a €500 million (US$707 million) package proposed by the Austrian government to aid the country’s failing flag carrier.
Photo: Lufthansa
